March 12, 2014 / 4:31 PM / 4 years ago

Fitch: No Rating Impact on NIBC from German Acquisition

(The following statement was released by the rating agency) PARIS/LONDON, March 12 (Fitch) Fitch Ratings says that The Netherlands-based NIBC Bank N.V.'s (NIBC, BBB-/Stable/F3) announced acquisition of Gallinat-Bank AG (Gallinat), a small German asset finance bank, is not material to its ratings. Closing of the transaction, subject to customary regulatory approvals, is expected within the next two months. The acquisition provides NIBC with improved funding diversification in the German market, and also expands its German presence with asset finance to "Mittlestand" companies. This complements the bank's corporate banking services in Germany, which it has provided for more than a decade, as well as retail services operated in the country since 2009. At end-2013, almost one quarter of NIBC's corporate loan book was to German counterparties. The financial impact on NIBC is limited, in Fitch's view. Execution risk is manageable, and Gallinat's operating environment is familiar to NIBC, albeit with a slightly different asset class. This acquisition increases NIBC's total assets by less than 3%, largely composed of financing and leasing products funded by customer deposits. Fitch expects the acquisition to have a small negative impact on NIBC's solid capital ratios (Core Tier 1 ratio of 18.1% at end-2013) and views funding needs for the purchase as immaterial to the bank's total liquidity. According to NIBC, the purchase price is around EUR14m and at a discount to Gallinat's net book value. NIBC also published its 2013 results today, which were in line with Fitch's expectations. While a recovery in net interest income is beginning to come through, recurring profitability remains modest. Net interest margin is tight as a result of NIBC's decision to maintain a large cash buffer ahead of significant debt maturities in 2014, but also given more structural challenges, such as higher funding costs in a 'post-crisis' environment. Contact: Philippe Lamaud Director +33 1 4429 91 26 Fitch France S.A.S. 60, rue de Monceau 75008 Paris Eris Huang Analyst +44 203 530 1493 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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